U.S. PPI hits hard, shattering market illusions!

What does the 6% inflation data mean?

U.S. April PPI year-over-year 6%, after this number was released, the market finally realized:
Inflation has not been completely ended.
Over the past six months, the biggest pillar of the global capital markets has been "interest rate cut expectations."
Tech stocks surged wildly, crypto markets warmed up, and risk assets rebounded across the board.
The core logic is only one sentence:
The Federal Reserve will eventually loosen monetary policy.
Now, the PPI suddenly exploded.
The market has started to recalculate the entire script.
Why is PPI so important?
Because it is "upstream prices."
Raw materials, manufacturing, transportation, energy all rose, and ultimately, it will pass through to consumers.
To put it simply:
Companies cannot bear the losses themselves.
So, the most feared thing in the market has happened—inflation may rebound a second time.
This means the Federal Reserve is likely to continue maintaining high interest rates.
And in an era of high interest rates, all risk assets are unfriendly.
Tech stock valuations will come under pressure;
Real estate financing will become more expensive;
Crypto market liquidity will be drained.
The environment of "buying blindly and still rising" in the past may become increasingly rare.
But what is even more dangerous is market sentiment.
Investors are now in an extremely sensitive state.
One data point exceeding expectations causes the entire network to shout "crash";
One data point below expectations causes the entire network to start shouting "bull market."
Market volatility is increasingly like an emotional game.
And the big funds now care less about short-term rises and falls.
They are concerned about:
Will the U.S. enter a "long-term high inflation + high interest rate" new era?
If the answer is "yes," then the global asset pricing logic may change.
So don’t underestimate this PPI.
Many times, a single number is enough to change the market direction of an era.